Although the Federal Housing Finance Agency’s recent stress test results showing that the GSEs could need up to $125 billion in a severe economic crisis, quarterly earnings continue to show a profitability that cancels out the need for a bailout. Required annually by the Dodd-Frank Act, the test of severely adverse scenario is based on Fannie Mae and Freddie Mac portfolios as of Dec. 31, 2015. …
A personal relationship between Fannie Mae CEO Tim Mayopoulos and Heather Russell, the chief legal officer for Fifth Third Bancorp, caused the bank to terminate its top lawyer because of conflict of interest concerns. Both Mayopoulos and Russell are separated from their spouses, and both revealed the relationship to their respective companies. “Mr. Mayopoulos previously disclosed the relationship to Fannie Mae’s Office of Compliance and Ethics. The Office of Compliance and Ethics provided appropriate direction to Mr. Mayopoulos, and he followed it,” according to a spokesman for Fannie. “Further, Mr. Mayopoulos has no involvement in Fannie Mae’s relationship with Fifth Third Bank. Quite simply, there is no conflict of interest under Fannie Mae’s corporate policies,” said the spokesman.
The Federal Housing Finance Agency extended the response deadline on its “request for input” on the credit risk-transfer program. The response period will now close on Oct. 13, 2016, instead of Aug. 29.The FHFA extended it by 45 days because various industry stakeholders said they wanted more time to evaluate the information and questions raised in the RFI. Back in June, the FHFA asked for industry feedback on various aspects of its CRT program. Fannie Mae’s Connecticut Avenue Securities program and Freddie Mac’s Structured Agency Credit Risk program have accounted for the bulk of GSE risk-transfer activity since the program was launched three years ago.
GSEs Offer Forbearance for Flood-Damaged Homes. With more than 40,000 homes hit by deadly flooding in Louisiana this week, Fannie Mae and Freddie Mac are offering temporary mortgage suspensions. Fannie Mae said servicers can grant forbearance of up to 90 days to borrowers they believe were impacted by the flood, whether they make contact with them or not. When they make contact, the servicer can offer up to six months of forbearance, which can then be extended with approval. Also, lenders must verify the condition of the property of loans originated and sold to the GSE. Freddie’s policy allows for forbearance and foreclosure suspension up to 12 months. Penalties and late fees against disaster-damaged homes are also waived.
Some 61.0 percent of loans securitized by Ginnie Mae in the first half of 2016 were purchase mortgages, compared to 46.2 percent for Fannie Mae and Freddie Mac…
The private MI share of new primary insurance rose 6.0 percentage points to 37.8 percent during the second quarter, while the FHA share fell 5.4 percentage points to 34.4 percent…
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